Written by Raymond Kuo.

Taiwan’s Democratic Progressive Party (DPP) won a historic victory in the island’s January elections. But this victory has prompted concerns of renewed tensions between China and Taiwan as the traditionally pro-independence DPP transitions into control of the island’s Executive and Legislature. In response, Beijing defaulted to its longstanding “deterrence policy”, demanding that Taiwanese President-Elect Tsai affirm the so-called 1992 consensus or see a marked and possibly violent deterioration in relations. Such threats have historically backfired. More importantly, they reveal a fundamental misunderstanding of Taiwanese democracy, the long-term demographic shift the latest election represents, and how these dynamics are redefining cross-Strait relations. Theoretically, it marks a failure to appreciate the critical difference between Thomas Schelling’s concepts of deterrence and compellence.

For decades, both China and to a lesser extent the U.S. have maintained a deterrent posture towards Taiwan, aiming to either prevent renewed cross-Strait military conflict or a formal declaration of independence. The Chinese logic of action is that if Taiwan does something, Beijing will impose a punishment. The U.S. employs a similar logic to deter both sides from taking actions that would unilaterally alter the cross-Strait status quo.

The critical dynamic is that force is threatened to prevent an action from being implemented. This policy worked reasonably well under martial law and even into the early years of democracy in Taiwan, for two reasons. Firstly, deterrence can be “clearly” implemented. Schelling notes that actors need only draw bold red lines and delineate the consequences of non-compliance. These conditions are fairly easy to convey, as the adversary only has to observe the preparations the actor has already made. Then, the actor simply waits.  Costs are imposed only if the adversary acts, so deterrence can be maintained indefinitely.

Secondly, the KMT faced little domestic pressure to cross the American or Chinese red lines. Initially harshly repressive, the party gained uncontested authority over Taiwan for decades. Moreover, the U.S. possessed significant leverage over Taipei, as the KMT was dependent upon American arms, training, intelligence, and direct military support for a hypothetical sustained confrontation with China. In short, the benefits of compliance were high and clearly conveyed, while the benefits of non-compliance were low and uncertain.

But since the DPP’s political emergence, Taiwanese identity has erupted as a prominent political force. A clear majority now identify themselves as Taiwanese, while only 3.5 percent view themselves as Chinese alone. 80 percent would choose independence if there were no threat of Chinese retaliation, while a similar percentage view Taiwan and China as separate countries. Moreover, this is not a short-term trend. Youth on the island identify even more strongly with a separate Taiwanese identity, as vividly demonstrated by the 2014 Sunflower Movement.

This shift has important policy effects. American analysts in particular contend that the DPP won by campaigning on “bread and butter” issues and corruption. This is true, but misses the point. Taiwanese identity is the prism through which many policy issues are now viewed, including economic ones; in addition to their somewhat dubious benefits. The Chung-Hua Institute for Economic Research found that the Economic Cooperation Framework Agreement resulted in significant trade diversion, rather than creation. That is, rather than spurring new trade between Taiwan and China, the ECFA and its subsequent agreements would simply redirect trade from, say the U.S., towards China. Ma’s trade agreements with China inspired the Sunflower protests because these bills were negotiated without sufficient public oversight, sparking general concern that they would lead to economic domination by Beijing.

The latest election reflects these demographic trends. While the Taiwanese are cautious about military confrontation with Beijing, there is broad public support for building and asserting a separate political identity and economic path from China. Taken together, Taiwanese identity as a political force converts cross-Strait deterrence into “compellence”. Rather than preventing from starting an action (a cross-Strait war, a declaration of independence), Beijing and Washington are telling it to stop doing something Taiwan has strong reasons to continue: listen to its own people, who favour a more independent position.

Under compellence, costs are imposed until the adversary stops doing something or until it does something the actor wants. This automatically makes it more economically and politically costly, as actors must actively and continuously punish their adversaries. As such, compellence cannot be maintained indefinitely, or at least not without the actor accepting escalating costs.

Second, compellence lacks deterrence’s clarity. In attempting to coerce action, Schelling points out that there is always some uncertainty about exactly what actions should be pursued. What exact policies will invite reprisal, which ones will not? Just how much must Taiwan adjust its actions to satisfy the Chinese or Americans? The communication problems endemic to interstate coercion are exacerbated when an actor is attempting to affect not just foreign policy compliance, but a state’s domestic policy.

Third, any ROC government has a strong reason not to comply with compellent threats: Doing so undercuts legitimate public support. For any Taiwanese government in this new demographic environment, the benefits of non-compliance with Chinese threats are high, and the timing, certainty, and triggers of retaliatory action have become vague and uncertain. Indeed, recent Chinese threats have a compellent, not deterrent, character, either seeking to compel action (vote for a particular candidate) or failing to specify red lines. For example, in 1996, the Chinese fired missiles over the Strait to influence the island’s presidential election.  It acted similarly when threatening Taiwan with neutron bomb in 1999. The “Anti-Secession” Law, passed in 2005, reserved Beijing’s right to use military force against Taiwanese separatism, but it notably did not specify when that force would be used, causing considerable uncertainty in Taiwan. These actions have notably all failed or caused significant confusion about China’s position.

My argument – that shifting identity politics converts deterrence into compellence – leads to several critical policy implications. First, Beijing and Washington can do little to change this situation. This is a long-term, even generational process. China’s actions in particular have only spurred further identification with a unique Taiwanese identity.

Second, both governments fundamentally misunderstand the effect of Taiwanese democracy on Taiwan’s foreign policy. Taiwanese identity is a politically potent force, one that constrains the policy options of any ROC government, whether DPP or KMT. Securing Taiwanese compliance on any international agreement requires shifting the terms of negotiation to encompass this position.

Third, some American analysts have observed these same identity shifts and argue that the U.S. should give up its defense of Taiwan. This would be strategically disastrous for the U.S. Smoothly integrating China into the liberal order the U.S. helped to create, maintain, and lead is the central geostrategic goal for this century. Taiwan is and can be a critical partner in this plan, especially as Beijing deals with an uncertain economy and increasing questions about its political leadership. Taiwan stands as an example of a successful, democratic country with “Chinese” culture. Alongside Japan, South Korea, and the Philippines, it serves as a military bulwark against Beijing’s aggression in the East China Sea, as well as acting in the South China Sea. It is, as General MacArthur once put it, an unsinkable aircraft carrier in a critical geographic position. Moreover, a strong Taiwanese identity severely complicates any Chinese plan to take and hold the island.

China will not give up its costly and counterproductive compellent policy, but the U.S. can and should. Washington should maintain clear deterrence against any policies that will cause renewed cross-Strait military conflict. But if it hopes to effectively manage cross-Strait relations, the U.S. must work within the parameters set by the Taiwanese public. Taiwan’s example as a Chinese culture that fosters a vibrant capitalist democracy is especially critical as China undergoes substantial economic and even political change over the next decade. Moreover, Washington should align its Taiwan policy with its liberal order, supporting the island’s participation in international organizations and cooperative security efforts. This policy better aligns the U.S.’ Taiwan policy with its overall grand strategy, and it jettisons an increasingly counterproductive compellence framework. In the long-run, the Taiwanese people will accept nothing less.

Dr Raymond Kuo is an Assistant Professor at Fordham University. He specializes in international security, American foreign policy, and his current research focuses on international order and security and the political effects of technology and democratisation. Image Credit: CC by wei zheng wang/Flickr.